New York Insurance Coverage Law Update

Auto Policy Covers Suit Alleging Passenger Tripped After Bus Arrived At Location, First Department Says 

After a bus arrived at its destination, the driver unloaded the luggage. A passenger allegedly tripped while looking for her suitcase and sued the bus company. The Appellate Division, First Department, held that the bus company was entitled to a defense and indemnity under its auto policy which  provided coverage for bodily injury caused by an accident and resulting from the ownership, maintenance or use of a covered auto. The appellate court found that the accident resulted from the bus company’s use of its bus, regardless of whether the claimant tripped over a suitcase unloaded by the bus driver or tripped on the curb while looking for her suitcase.  [Peter Pan Bus Lines, Inc. v. Hanover Ins. Co., 2018 N.Y. Slip Op. 00467 (1st Dep’t Jan. 25, 2018).]

Alleged Injury Resulted From “Accident” From Insured’s Point Of View, Third Department Rules

The insured alleged that he tried to stop an acquaintance he believed was not fit to drive by placing his foot in the driver’s side of the car and grabbing the keys from the driver, but that the driver said that he was going to “cut [the insured’s] leg off,” “threw the car in drive” and “screeched” away, dragging the insured. The insurer denied the insured’s claim for uninsured motorist benefits, asserting that his injuries resulted from intentional acts and, therefore, were not due to a covered “accident”. The Appellate Division, Third Department, ruled that, whatever the driver’s intent and criminal liability, the incident was “an accident from the insured’s point of view,” since having his leg trapped and being dragged was “sudden” and “unexpected, unusual and unforeseen.” [Matter of Arbitration between Progressive Advanced Ins. Co. and Widdecombe, 2018 N.Y. Slip Op. 00061 (3d Dep’t Jan. 4, 2018).]

First Department Holds Signed Bid Proposal Enough To Find Additional Insured Coverage For Property Owner

A lawsuit alleging an injury at a construction site was filed against the property owner, which sought additional insured coverage under a contractor’s insurance policy. The policy provided additional insured coverage to any “entity required by written contract … to be named as an insured.” The Appellate Division, First Department, ruled that a “Bid Proposal Document” for the project was such a written contract, even though the parties had intended to execute a more formal agreement. The proposal, the court pointed out, named the parties and the “total agreed price,” contained the dated signatures of the parties, incorporated by reference “the approved plan for the entire project,” and required the contractor to obtain a policy naming the owner as an additional insured. Accordingly, the court ruled, the insurer had to defend and indemnify the owner. Netherlands Ins. Co. v. Endurance Am. Specialty Ins. Co., 2018 N.Y. Slip Op. 00105 (1st Dep’t Jan. 9, 2018).]

Auto Exclusion Precluded Coverage For Action By Contractor’s Employee, District Court Decides

A contractor’s employee allegedly was injured at a construction site while removing ductwork from his employer’s truck and delivering it to the construction site.  As a result, he sued another contractor.  The other contractor filed a contractual indemnity claim against the employer, whose insurer disclaimed coverage, relying upon the policy’s auto exclusion.  The exclusion precluded coverage for bodily injury arising out of the use, including the loading and unloading, of any auto. The United States District Court for the Eastern District of New York held that the exclusion precluded coverage because the employee’s alleged injury occurred during the loading and unloading as the claimant was injured prior to the ultimate delivery of the goods. [Striker Sheet Metal II Corp. v. Harleysville Ins. Co., No. 2:16-cv-05916 (ADS)(AYS) (E.D.N.Y. Jan. 31, 2018).]

Businessowners Policy Did Not Cover Owned Auto, Second Circuit Confirms

After a company-owned van was involved in an accident and the driver of the other vehicle sued, the company sought coverage under its businessowners and umbrella insurance policies. The United States Court of Appeals for the Second Circuit found no coverage under the businessowners policy because it did not provide coverage for an owned auto. The court also concluded that the umbrella policy did not afford coverage for an owned auto and that New York’s timely disclaimer requirement in New York Insurance Law §3420(d) did not apply because the underlying insurance – the businessowners policy – did not apply to an owned auto. The court reasoned that the auto exclusion in the umbrella policy did not trigger the timely disclaimer requirement because there was no coverage in the first place and the exclusion was “belt and suspenders.”  [Citizens Ins. Co. of Am. v. Risen Foods, LLC, 880 F.3d 73 (2d Cir. 2018).]